Standard Oil Co. v. La Crosse Super Auto Serv., Inc.

• Decision Date: 05 February 1935
• Citation: 217 Wis. 237,258 N.W. 791
• Parties: STANDARD OIL CO. v. LA CROSSE SUPER AUTO SERVICE, INC., ET AL.
• Court: Wisconsin Supreme Court

217 Wis. 237

258 N.W. 791

STANDARD OIL CO.

v.LA CROSSE SUPER AUTO SERVICE, INC., ET AL.

Supreme Court of Wisconsin.

Feb. 5, 1935.

Appeal from a judgment of the Circuit Court for La Crosse County; R. S. Cowie, Circuit Judge.

Affirmed.

FOWLER and FAIRCHILD, JJ., dissenting.

This action was commenced by the plaintiff, Standard Oil Company, on December 16, 1933, against the defendants, La Crosse Super Auto Service, Inc., and Thomas E. Woolley, to recover the possession of three electric gasoline pumps and connecting pipes, three underground gasoline tanks and fittings, six lubricating outfits, and one pump and dolly, which the plaintiff asserted it had a right to remove from certain premises owned by La Crosse Super Auto Service, Inc., and mortgaged to Woolley. From a judgment entered June 18, 1934, in favor of the plaintiff as to the property mentioned, and which also adjudged that the plaintiff recover from La Crosse Super Auto Service, Inc., the sum of $61.86, the defendants appealed. The facts will be stated in the opinion.

Higbee & Higbee, of La Crosse, for appellants.

Hale & Burke, of La Crosse, for respondent.

NELSON, Justice.

On October 29, 1929, one Farris was the owner of certain vacant premises located at the corner of Fourth and Cass streets in the city of La Crosse, upon which he proposed to construct a super auto service station. On that day he applied to the defendant Woolley for a loan to be used in constructing the proposed station and at that time exhibited to him certain plans and specifications, which did not include gasoline pumps or underground tanks, but did show where they were to be located. On that day Woolley loaned to Farris the sum of $20,000, which loan was secured by a mortgage on the premises mentioned. After executing the mortgage, Farris organized the defendant La Crosse Super Auto Service, Inc., and thereafter conveyed the premises to it, subject to the mortgage which it assumed. On March 4, 1930, the defendant La Crosse Super Auto Service, Inc., leased to the plaintiff a part of the premises, which included the approach to the station, the rest room, and toilets situated in the building. The plaintiff thereafter installed three underground tanks beneath the concrete approach to the station and four gasoline pumps upon a concrete base, constructed for that purpose. One of the pumps was later removed and is not involved in this action. The lease, among other things, provided that the plaintiff should pay all taxes levied or assessed upon the property belonging to it upon said premises and that it should have the right at any time within thirty days after the termination of the lease to remove any equipment at any time placed thereon by it. The term of the lease was one year with the privilege of a four-year extension. The lease also provided that it might be terminated by giving ten days' written notice. Some time before the commencement of this action, both Farris and La Crosse Super Auto Service, Inc., defaulted as to certain principal and interest payments. Woolley thereupon demanded possession of the station, and La Crosse Super Auto Service, Inc., surrendered it to him. The plaintiff thereafter gave written notice of its option to terminate the lease and demanded the right to remove the tanks and pumps, which demand was refused. Woolley did not know of the provisions of the lease which permitted the plaintiff to remove the equipment installed by it upon the premises upon termination of the lease. Action was thereupon commenced to obtain possession of the property described. The defendant Woolley answered and alleged in substance that the gasoline tanks and pumps were fixtures and were subject to the lien of his mortgage, having become incorporated into the real estate. La Crosse Super Auto Service, Inc., similarly answered and also counterclaimed for $400 rent and $55 commissions asserted to be due it. The plaintiff served a reply in which it denied that there was due to the La Crosse Super Auto Service, Inc., more than $28 rent, and in which it admitted that it owed said defendant $55.52 as commissions. The plaintiff alleged by way of counterclaim that the defendant La Crosse Super Auto Service, Inc., was indebted to it in the sum of $102.89, after duly crediting what it owed the said defendant for rent and commissions.

The court found the facts substantially as stated and also that the plaintiff was the owner of the equipment and entitled to its immediate possession; that none of the equipment was placed in or upon the premises as a permanent improvement; that at the time the plaintiff placed the equipment upon the premises it did not intend that said equipment should remain permanently; and that the equipment mentioned could be removed from the premises without material injury thereto. The court concluded that the plaintiff was entitled to a return of the equipment or judgment for its fair value, and that the plaintiff was entitled to a separate judgment against the defendant La Crosse Super Auto Service, Inc., for the sum of $61.86.

[1] The defendants first contend that the court erred in finding and concluding, under all of the circumstances, that the gasoline pumps and tanks were not fixtures and were not subject to the lien of the Woolley mortgage. Whether articles of personal property are fixtures, i. e., real estate, is determined in this state, if not generally, by the following rules or tests: (1) Actual physical annexation to the real estate; (2) application or adaptation to the use or purpose to which the realty is devoted; and (3) an intention on the part of the person making the annexation to make a permanent accession to the freehold. Taylor v. Collins, 51 Wis. 123, 8 N. W. 22, 25;Walker v. Grand Rapids F.-M. Co., 70 Wis. 92, 35 N. W. 332;Homestead Land Co. v. Becker, 96 Wis. 206, 71 N. W. 117, 118;Thomsen v. Cullen, 196 Wis. 581, 219 N. W. 439.

It has often been said by this court that the matter of physical annexation of the article to the freehold is relatively unimportant.

“This matter of intention is coming to be the main test in such cases, and the matter of physical annexation of comparatively little importance.” Taylor v. Collins, supra.

“The matter of intention of the parties is held to be the principal consideration.” Homestead Land Co. v. Becker, supra.

When the article “is attached for a mere temporary use, with the present intention of removal, it continues to be personal property.” Gunderson v. Swarthout, 104 Wis. 186, 191, 80 N. W. 465, 466, 76 Am. St. Rep. 860.

This is especially true with respect to trade fixtures. Shields v. Hansen, 201 Wis. 349, 230 N. W. 51;Zimmerman v. Treleven, 192 Wis. 214, 212 N. W. 266;Hanson v. Ryan, 185 Wis. 566, 201 N. W. 749, 36 A. L. R. 1516;Brobst v. Marty, 162 Wis. 296, 156 N. W. 195.

[2] The plaintiff concedes that if the gasoline pumps and tanks when installed were common-law fixtures, then they were subject to the lien of the Woolley mortgage, and could not be removed without the consent of Woolley. Fuller-Warren Co. v. Harter, 110 Wis. 80, 85 N. W. 698, 53 L. R. A. 603, 84 Am. St. Rep. 867. The plaintiff, however, maintains, and the trial court found, that the pumps and tanks under the undisputed facts never became common-law fixtures.

There is no doubt as to what the intention of the plaintiff and the defendant La Crosse Super Auto Service, Inc., was at the time the tanks and pumps were installed and at all times thereafter during the term of the lease. The facts clearly show that both the plaintiff and the said defendant intended that the pumps and tanks should not become a part of the realty, but should be installed for the temporary use and purposes of the plaintiff, under an express agreement which permitted the plaintiff, as tenant, to install the equipment upon the premises and to remove it upon the termination of the lease. Unless we are required to hold that the mort gagee, in a situation like this, may rightly claim such property notwithstanding the clearly expressed intention of the tenant and the owner-mortgagor that the property should be temporarily, not permanently, annexed to the realty, simply because it was annexed to the freehold and was adapted to the use or purpose to which the real estate was devoted, the contention of the defendants cannot be sustained. In Fuller-Warren Co. v. Harter, supra, upon which the defendants principally rely, it was held, under the facts of that case, that the character of the accession cannot be preserved by contract between the vendor and vendee of personalty as against the owner of a mortgage of the real estate existing when the annexation is made, who is not a party to such contract; that a contract between a vendor and vendee reserving title to personal property which is to be incorporated into the real estate of the latter as a permanent improvement thereof, such realty being incumbered by a mortgage and the mortgagee not being a party to the contract, is invalid as to the mortgagee. In that case it was sought to recover a furnace which had been installed in the house of a Mrs. Shurt under a contract guaranteeing the furnace to heat the house to a specific temperature under specified conditions and providing that in the event of its failure so to do and notice thereof to the plaintiff, the latter should have the option either to make the furnace heat the house as guaranteed or remove the same. In that case it was said (page 85 of 110 Wis., 85 N. W. 698, 700): “As before indicated, the contract of sale contemplated physical annexation of the plant to and incorporation of it with the building it was designed to heat as a permanent improvement thereof, reserving the right to remove it as a mere security against losing the property as well as the pay for it if it failed to satisfy the warranty. All the essentials to change the chattel character of the property to real estate were satisfied, viz.: Physical annexation of one to the...